2,500,000 Shares
TII INDUSTRIES. INC.
Common Stock
UNDERWRITING AGREEMENT
_____________, 1997
Xxxxxx & Xxxxxxx, Inc.
c/o Rodman & Xxxxxxx, Inc.
000 Xxxxxxx Xxxxxx
2 World Financial Center
New York, New York 10281
On behalf of the Several
Underwriters named in
Schedule I attached hereto.
Ladies and Gentlemen:
TII Industries, Inc., a Delaware corporation (the "Company") proposes
to sell to you and the other underwriters named in Schedule I attached hereto
(the "Underwriters"), for whom you are acting as the Representative, an
aggregate of 2,500,000 shares (the "Firm Shares") of the Company's Common Stock,
$.01 par value per share (the "Common Stock") to be issued and sold by the
Company. In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 375,000 shares (the "Option Shares") of
Common Stock for the purpose of covering over-allotments in connection with the
sale of the Firm Shares. The Firm Shares and the Option Shares are together
called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell the Firm Shares, to the
several Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase at the purchase price per share of Common Stock
of $_____ (the "Initial Price"), the
aggregate number of Firm Shares set forth opposite such Underwriter's
name in Schedule I attached hereto. The Underwriters agree to offer the
Firm Shares to the public as set forth in the Prospectus.
(b) The Company grants to the several Underwriters an option to
purchase all or any part of the number of Option Shares at the Initial
Price. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage (adjusted by the Representative to
eliminate fractions) of the total number of Option Shares to be
purchased by the Underwriters as such Underwriter is purchasing of the
Firm Shares. Such option may be exercised only to cover over-allotments
in the sales of the Firm Shares by the Underwriters and may be exercised
in whole or in part at any time on or before 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date (as
defined below), and from time to time thereafter within 30 days after
the date of this Agreement, upon written or telegraphic notice, or
verbal or telephonic notice confirmed by written or telegraphic notice,
by the Representative to the Company no later than 12:00 noon, New York
City time, on the business day before the Firm Shares Closing Date or at
least two business days before any Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm Shares
to the Representative for the respective accounts of the Underwriters, and
payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (next day) funds to the Company, shall take
place at the offices of Xxxxxx & Xxxxxxx, Inc., at 000 Xxxxxxx Xxxxxx, 2 World
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, at 10:00 a.m., New York City time,
on the third business day following the date on which the public offering of the
Shares commences (unless such date is postponed in accordance with the
provisions of Section 10(b)), or at such time and place on such other date, not
later than 10 business days after the date of this Agreement, as shall be agreed
upon by the Company and the Representative (such time and date of delivery and
payment are called the "Firm Shares Closing Date"). The public offering of the
Shares shall be deemed to have commenced at the time, which is the earlier of
(a) the time, after the Registration Statement (as defined in Section 4 below)
becomes effective, of the release by you for publication of the first newspaper
advertisement which is subsequently published relating to the Shares or (b) the
time, after the Registration Statement becomes effective, when the Shares are
first released by you for offering by the Underwriters or dealers by letter or
telegram.
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representative for the
respective accounts of the Underwriters and payment of the purchase price by
certified or official bank check or checks payable in New York Clearing House
(next day) funds to the Company shall take place at the offices of Xxxxxx &
Xxxxxxx, Inc. specified above at the time and on the date (which may be the same
date as, but in no event shall be earlier than, the Firm Shares Closing Date)
specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment is called the "Option
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Shares Closing Date"). The Firm Shares Closing Date and the Option Shares
Closing Dates are called, individually, a "Closing Date" and, together, the
"Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representative shall request at least two
full business days before the Firm Shares Closing Date or the Option Shares
Closing Date, as the case may be, and shall be made available to the
Representative for checking and packaging, at such place as is designated by the
Representative, on the full business day before the Firm Shares Closing Date or
the Option Shares Closing Date, as the case may be.
3. Public Offering. The Company understands that the Underwriters
propose to make a public offering of the Shares, as set forth in and pursuant to
the Prospectus (as defined in Section 4 below), as soon after the effective date
of the Registration Statement and the date of this Agreement as the
Representative deems advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each preliminary prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement,
and may have filed one or more amendments thereto, on Form S-2
(Registration No. 333-_____), including in such registration
statement and each such amendment a related preliminary
prospectus (a "Preliminary Prospectus"), for the registration of
the Shares and the Option Shares, in conformity with the
requirements of the Securities Act of 1933, as amended (the
"Act"). In addition, the Company has filed or will promptly file
a further amendment to such registration statement, in the form
heretofore delivered to you. As used in this Agreement, the term
"Registration Statement" means such registration statement, as
amended, and any registration statement filed pursuant to Rule
462(b) of the Act, on file with the Commission at the time such
registration statement becomes effective (including the
prospectus, financial statements, exhibits, and all other
documents filed as a part thereof or incorporated by reference
directly or indirectly therein (such incorporated documents
being herein collectively "Incorporated Documents")), provided
that such Registration Statement, at the time it becomes
effective, may omit such information as is permitted to be
omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the General Rules and
Regulations promulgated under the Act (the "Regulations"), which
information ("Rule 430 Information") shall be deemed to be
included in such Registration Statement when a final prospectus
is filed with the Commission in
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accordance with Rules 430A and 424(b)(1) or (4) of the
Regulations; the term "Preliminary Prospectus" means each
prospectus included in the Registration Statement, or any
amendments thereto, before it becomes effective under the Act,
the form of prospectus omitting Rule 430A Information included
in the Registration Statement when it becomes effective, if
applicable (the "Rule 430A Prospectus"), and any prospectus
filed by the Company with your consent pursuant to Rule 424(a)
of the Regulations; and the term "Prospectus" means the final
prospectus included as part of the Registration Statement,
except that if the prospectus relating to the securities covered
by the Registration Statement in the form first filed on behalf
of the Company with the Commission pursuant to Rule 424(b) of
the Regulations shall differ from such final prospectus, the
term "Prospectus" shall mean the prospectus as filed pursuant to
Rule 424(b) from and after the date on which it shall have first
been used.
(ii) When the Registration Statement becomes effective,
and at all times subsequent thereto to and including the Closing
Dates, and during such longer period as the Prospectus may be
required to be delivered in connection with sales by the
Underwriters or a dealer, and during such longer period until
any post-effective amendment thereto shall become effective, the
Registration Statement (and any post-effective amendment
thereto) and the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment
or supplement to the Registration Statement or the Prospectus)
will contain all statements which are required to be stated
therein in accordance with the Act and the Regulations, will
comply with the Act and the Regulations, and will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading, and no event will have
occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which
has not then been set forth in such an amendment or supplement;
if a Rule 430A Prospectus is included in the Registration
Statement at the time it becomes effective, the Prospectus filed
pursuant to Rules 430A and 424(b)(1) or (4) will contain all
Rule 430A Information; and each Preliminary Prospectus, as of
the date filed with the Commission, did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading; except that no representation
or warranty is made in this Section 4(a)(ii) with respect to
statement or omissions made in reliance upon and in conformity
with written information furnished to the Company as stated in
Section 7(b) with respect to any Underwriter by or on behalf of
such Underwriter through the Representative expressly for
inclusion in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement
thereto. Each of the Incorporated Documents complies in all
material respects with the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations thereunder.
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(iii) The Company has not distributed and will not
distribute, prior to the later of the Option Shares Closing Date
and the completion of the Underwriters' distribution of the
Common Stock, any offering material in connection with the
offering and sale of the Common Stock other than a Preliminary
Prospectus, Prospectus or the Registration Statement.
(iv) Neither the Commission nor the "blue sky" or
securities authority of any jurisdiction have issued an order (a
"Stop Order") suspending the effectiveness of the Registration
Statement, preventing or suspending the use of any Preliminary
Prospectus, the Prospectus, the Registration Statement, or any
amendment or supplement thereto, refusing to permit the
effectiveness of the Registration Statement, or suspending the
registration or qualification of the Firm Shares or the Option
Shares nor has any of such authorities instituted or threatened
to institute any proceedings with respect to a Stop Order.
(v) Any contract, agreement, instrument, lease, or
license required to be described in the Registration Statement
or the Prospectus has been properly described therein. Any
contract agreement, instrument, lease, or license required to be
filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to or has been incorporated as
an exhibit by reference into the Registration Statement.
(vi) The Company has no subsidiary or subsidiaries and
does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business
organization, except for those listed on Schedule II hereto and
for those permitted to be excluded pursuant to Item 601, Exhibit
21 or Regulation S-K (each such corporation singly a
"Subsidiary" and collectively, the "Subsidiaries"). Each of the
Company and each of the Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of incorporation, with full corporate power
and authority, and all necessary consents, authorizations,
approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state,
possession, local, foreign and other governmental authorities
and all courts and other tribunals, to own, lease, license, and
use its properties and assets and to carry on its business as
now being conducted and in the manner described in the
Prospectus. Each of the Company and each of the Subsidiaries is
duly qualified to do business and is in good standing in each
jurisdiction in which its ownership, leasing, licensing, or
character, location or use of property and assets or the conduct
of its business makes such qualification necessary. Neither the
Company nor any Subsidiary owns, leases or licenses any property
or conduct any business outside the United States of America,
except as described in the Prospectus.
(vii) The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock, of which
8,099,440 shares are outstanding and 1,000,000
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shares of Preferred Stock, $1.00 par value per share (the
"Preferred Stock"), none of which are outstanding. Each
outstanding share of Common Stock and each outstanding share of
capital stock of each Subsidiary has been duly and validly
authorized and issued, fully paid, and non-assessable, without
any personal liability attaching to the ownership thereof and
has not been issued and is not owned or held in violation of any
preemptive rights of shareholders and, in the case of the
Subsidiaries, is owned of record and beneficially by the
Company, free and clear of all liens, security interests,
pledges, charges, encumbrances, stockholders' agreements, and
voting trusts. There is no commitment, plan, preemptive right or
arrangement to issue, and no outstanding option, warrant, or
other right calling for the issuance of, shares of capital stock
of the Company or of any Subsidiary or any security or other
instrument which by its terms is convertible into, exercisable
for, or exchangeable for capital stock of the Company or of any
Subsidiary, except as may be properly described in the
Prospectus. There is outstanding no security or other instrument
which by its terms is convertible into or exchangeable for
capital stock of the Company or of any Subsidiary, except as may
be properly described in the Prospectus.
(viii) The consolidated financial statements of the
Company and the Subsidiaries included in the Registration
Statement and the Prospectus fairly present, with respect to the
Company and its Subsidiaries the financial position, the
consolidated results of operations, and the other information
purported to be shown therein at the respective dates and for
the respective periods to which they apply. Such financial
statements have been prepared in accordance with generally
accepted accounting principles (except to the extent that
certain footnote disclosures regarding any stub period may have
been omitted in accordance with the applicable rules of the
Commission under the Exchange Act) consistently applied
throughout the periods involved, are correct and complete, and
are in accordance with the books and records of the Company and
the Subsidiaries. The accountants whose report on the audited
financial statements is filed with the Commission as a part of
the Registration Statement are, and during the periods covered
by their report(s) included in the Registration Statement and
the Prospectus were, independent certified public accountants
with respect to the Company and the Subsidiaries within the
meaning of the Act and the Regulations. No other financial
statements are required by Form S-2 or otherwise to be included
in the Registration Statement or the Prospectus. There has at no
time been a material adverse change in the financial condition,
results of operations, business, properties, assets,
liabilities, or future prospects of the Company or any
Subsidiary from the latest information set forth in the
Registration Statement or the Prospectus, except as may be
properly described in the Prospectus.
(ix) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or before any public body or
board pending, threatened, or in prospect (or any basis
therefor)
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with respect to the Company, any Subsidiary, or any of their
respective operations, business, properties, or assets, except
as may be properly described in the Prospectus or such as
individually or in the aggregate do not now have and will not in
the future have a material adverse effect upon the operations,
business, properties, assets or financial condition of the
Company. Neither the Company nor any of the Subsidiaries is
involved in any labor dispute, nor is such dispute threatened,
which dispute would have a material adverse effect upon the
operations, business, properties, assets or financial condition
of the Company or the Subsidiaries. Neither the Company nor the
Subsidiaries is in violation of, or in default with respect to,
any law, rule, regulation, order, judgment, or decree; nor is
the Company or the Subsidiaries required to take any action in
order to avoid any such violation or default.
(x) The Company and each of the Subsidiaries has good
and marketable title in fee simple absolute to all real
properties and good title to all other properties and assets
which the Prospectus indicates are owned by it, and has valid
and enforceable leasehold interests in each of such items, free
and clear of all liens, security interests, pledges, charges,
encumbrances, and mortgages (except as may be properly described
in the Prospectus). No real property owned, leased, licensed or
used by the Company or the Subsidiaries lies in an area which
is, or to the knowledge of the Company or the Subsidiaries will
be, subject to zoning, use or building code restrictions which
would prohibit, and no state of facts relating to the actions or
inaction of another person or entity or his or its ownership,
leasing, licensing or use of any real or personal property
exists or will exist which would prevent, the continued
effective ownership, leasing, licensing or use of such real
property in the business of the Company or the Subsidiaries as
presently conducted or as the Prospectus indicates it
contemplates conducting (except as may be properly described in
the Prospectus).
(xi) Neither the Company nor any of the Subsidiaries,
nor to the knowledge of the Company and the Subsidiaries, any
other party, is now or is expected by the Company to be in
violation or breach of, or in default with respect to, complying
with any term, obligation or provision of any contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding which is material
to the Company and the Subsidiaries or by which any of its
properties or business may be bound or affected, and no event
has occurred which with notice or lapse of time or both would
constitute such a default, and each such contract, agreement,
instrument, lease, license, indenture, mortgage, deed
7
of trust, note, arrangement or understanding is in full force
and is the legal, valid and binding obligation of the parties
thereto and is enforceable as to them in accordance with its
terms. The Company and each of the Subsidiaries enjoys peaceful
and undisturbed possession under all leases and licenses under
which it is operating. Neither the Company nor any of the
Subsidiaries is a party to or bound by any contract, agreement,
instrument, lease, license, indenture, mortgage, deed of trust,
note, arrangement or understanding, or subject to any charter or
other restriction, which has had or may in the future have a
material adverse effect on the financial condition, results of
operations, business, properties, assets, liabilities or future
prospects of the Company or any of the Subsidiaries. Neither the
Company nor any of the Subsidiaries is in violation or breach
of, or in default with respect to, any term of its certificate
of incorporation (or other charter document) or by-laws or of
any franchise, license, permit, judgment, decree, order,
statute, rule or regulation.
(xii) The Company and each of the Subsidiaries has filed
all federal, state, local, possession and foreign tax returns
which are required to be filed through the date hereof, or have
received extensions thereof, and have paid all taxes shown on
such returns and all assessments received by it to the extent
that the same are material and have become due. The Company has
made adequate charges, accruals and reserves in its applicable
financial statements in respect of all federal, state,
possession and foreign income and franchise taxes for all
periods as to which the tax liability of the Company has not
been finally determined.
(xiii) All patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights,
copyright applications, franchises, and other intangible
properties and assets listed in the Registration Statement under
"Business-Patents and Trademarks" (all of the foregoing being
collectively herein called "Intangibles") that the Company and
the Subsidiaries own, possesses or have pending, or under which
they are licensed, are in good standing and uncontested. There
is no right under any Intangible necessary to the business of
the Company or the Subsidiaries as presently conducted or as the
Prospectus indicates the Company or the Subsidiaries
contemplates conducting (except as may be so described in the
Prospectus). Neither the Company nor any of the Subsidiaries has
infringed, is infringing, or has received any notice of
infringement with respect to asserted Intangibles of others. To
the knowledge of the Company and each of the Subsidiaries, there
is no infringement by others of Intangibles of the Company or
the Subsidiaries. To the knowledge of the Company and the
Subsidiaries, there is no Intangible of others which has had or
may in the future have a materially adverse effect on the
financial condition, results of operations, business,
properties, assets, liabilities or future prospects of the
Company and the Subsidiaries.
(xiv) Neither the Company nor any of the Subsidiaries
nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of the
Subsidiaries has, directly or indirectly: used any corporate
funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence
8
payment, kickback, or other unlawful payment. No transaction has
occurred between or among the Company and any of its officers or
directors or any affiliates or affiliates of any such officer or
director, except as described in the Prospectus.
(xv) The Company has all requisite power and authority
to execute, deliver and perform this Agreement. All necessary
corporate proceedings of the Company have been duly taken to
authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly authorized, executed,
and delivered by the Company, is the legal, valid and binding
obligation of the Company, and is enforceable as to the Company
in accordance with its terms. No consent, authorization,
approval, order, license, certificate or permit of or from, or
declaration or filing with, any federal, state, possession,
local, foreign or other governmental authority or any court or
other tribunal is required by the Company for the execution,
delivery or performance by the Company of this Agreement (except
filings under the Act which have been or will be made before the
applicable Closing Date and such consents consisting only of
consents under "blue sky" or securities laws which have been
obtained at or prior to the date of this Agreement). No consent
of any party to any contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding to which the Company is a party, or to which
any of its respective properties or assets are subject, is
required for the execution, delivery or performance of this
Agreement, and the execution, delivery and performance of this
Agreement, will not violate, result in a breach of, conflict
with, accelerate the due date of any payments under, or (with or
without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement, or understanding, or
violate or result in a breach of any term of the certificate of
incorporation (or other charter document) or by-laws of the
Company, or violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment or decree binding on the
Company or to which any of its operations, business, properties
or assets are subject.
(xvi) The Firm Shares and the Option Shares are duly and
validly authorized. The Firm Shares, when issued and delivered
in accordance with this Agreement, and the Option Shares, when
delivered in accordance with this Agreement, will be duly and
validly issued, fully paid, and non-assessable, without any
personal liability attaching to the ownership thereof, and will
not be issued in violation of any preemptive rights of
shareholders, optionholders, warrantholders and any other
persons and the Underwriters will receive good title to the Firm
Shares and Option Shares purchased by them, respectively, free
and clear of all liens, security interests, pledges, charges,
encumbrances, shareholders' agreements and voting trusts.
9
(xvii) The Common Stock, the Preferred Stock, the Firm
Shares and the Option Shares conform to all statements relating
thereto contained in the Registration Statement or the
Prospectus.
(xviii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as may otherwise be properly described
therein, there has not been any material adverse change in the
assets or properties, business or results of operations or
financial condition of the Company or any of the Subsidiaries,
whether or not arising from transactions in the ordinary course
of business; neither the Company nor any of the Subsidiaries has
sustained any material loss or interference with its business or
properties from fire, explosion, earthquake, flood or other
calamity, whether or not covered by insurance; since the date of
the latest balance sheet included in the Registration Statement
and the Prospectus, except as reflected therein, neither the
Company nor any of the Subsidiaries has undertaken any liability
or obligation, direct or contingent, except for liabilities or
obligations undertaken in the ordinary course of business; and
the Company has not (A) issued any securities or incurred any
liability or obligation, primary or contingent, for borrowed
money, (B) entered into any transaction not in the ordinary
course of business, or (C) declared or paid any dividend or made
any distribution on any of its capital stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its capital stock.
(xix) Neither the Company nor any of the Subsidiaries,
nor any of their officers, directors or affiliates (as defined
in the Regulations), has taken or will take, directly or
indirectly, prior to the termination of the underwriting
syndicate contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the
Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of
the Company, to facilitate the sale or resale of any of the Firm
Shares or the Option Shares.
(xx) The Company has obtained from each of its executive
officers and directors and principal shareholders, their
enforceable written agreement, in form and substance
satisfactory to counsel for the Underwriters, that for a period
of 180 days from the date on which the public offering of the
Shares commences they will not, without the prior written
consent of Xxxxxx & Xxxxxxx, Inc., offer, pledge, sell, contract
to sell, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, any shares of Common Stock or other
securities of the Company (or any security or other instrument
which by its terms is convertible into, exercisable for, or
exchangeable for shares of Common Stock or other securities of
the Company, including, without limitation, any shares of Common
Stock issuable under any employee stock options), beneficially
owned by them, except with respect to Shares being sold in
connection herewith or their being a beneficial owner of any
such Shares;
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(xxi) The Company is not, and does not intend to conduct
its business in a manner in which it would be, an "investment
company" as defined in Section 3(a) of the Investment Company
Act of 1940 (the "Investment Company Act").
(xxii) No person or entity has the right to require
registration of shares of Common Stock or other securities of
the Company because of the filing or effectiveness of the
Registration Statement, except such person or entities from whom
written waivers of such rights have been received prior to the
date hereof.
(xxiii) Except as may be set forth in the Prospectus,
neither the Company nor any of the Subsidiaries has incurred any
liability for a fee, commission or other compensation on account
of the employment of a broker or finder in connection with the
transactions contemplated by this Agreement.
(xxiv) No transaction has occurred between or among the
Company or any of the Subsidiaries and any of their respective
officers or directors or any affiliates of any such officer or
director, that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(xxv) The Common Stock, including the Shares, are
authorized for quotation on the Nasdaq National Market.
(xxvi) Neither the Company nor any of the Subsidiaries
nor any of their affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in
Cuba. If, at any time after the date that the Registration
Statement is declared effective with the Commission or with the
Florida Department of Banking and Finance (the "Florida
Department"), whichever date is later, and prior to the end of
the period referred to in the first clause of Section 4(a)(ii)
hereof, the Company commences engaging in business with the
government of Cuba or with any person or affiliate located in
Cuba, the Company will so inform the Florida Department within
ninety days after such commencement of business in Cuba, and
during the period referred to in Section 4(a)(ii) hereof will
inform the Florida Department within ninety days after any
change occurs with respect to previously reported information.
(xxvii) Except as described in the Prospectus: (i) there
are no outstanding loans, advances or guaranties of indebtedness
by the Company which are required to be described in the
Prospectus to or for the benefit of any of its "affiliates," as
such term is defined in Rule 405 under the Act, or any of the
officers or directors of the Company, or any of the members of
the "immediate family" (as that term is defined in Item 404(a)
of Regulation S-K under the Act) of any of such officers or
directors, or any of the "associates" (as that term is defined
in Rule 405 under the Act) of any of such officers, directors or
family members; and (ii) there are no material agreements or
understandings between the Company and any of the
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members of the immediate family of any of the officers or
directors of the Company, or any of the associates of any of
such officers, directors or family members.
(xxviii) The Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxix) Except as would not, individually or in the
aggregate, result in a material adverse change (i) the company
is not in violation of any federal, state, possession, local or
foreign law or regulation relating to pollution or protection of
human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "Materials of Environmental
Concern"), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not
limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the
Company under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof, nor has the Company
received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges
that the Company is in violation of any Environmental Law; (ii)
there is no claim, action or cause of action filed with a court
or governmental authority, no investigation with respect to
which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses
costs, natural resources damages, property damages, personal
injuries, attorneys' fees or penalties arising out of, based on
or resulting from the presence, or release into the environment,
of any Material of Environmental Concern at any location owned,
leased or operated by the Company, now or in the past
(collectively, "Environmental Claims"), pending or, to the best
of the Company's knowledge, threatened against the Company or
any person or entity whose liability for any Environmental Claim
the Company has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company's
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including,
without limitation, the
12
release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that reasonably could result
in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company or against any
person or entity whose liability for any Environmental Claim the
Company has retained or assumed either contractually or by
operation of law.
5. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject, in the
Representative's sole discretion, to each of the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and
no order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending
before or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Representative.
(c) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section
5(d) shall be true and correct when made and on and as of each Closing
Date as if made on such date and the Company shall have performed all
covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by it or them at or
before such Closing Date.
(d) The Representative shall have received on each Closing Date
a certificate, addressed to the Representative and dated such Closing
Date, of the chief executive or chief operating officer and the chief
financial officer of the Company to the effect that the persons
executing such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are true
and correct on and as of such Closing Date with the same effect as if
made on such Closing Date and the Company has performed all covenants
and agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to such Closing
Date.
(e) The Representative shall have received at the time this
Agreement is executed and on each Closing Date, signed letters from
Xxxxxx Xxxxxxxx LLP addressed to the Representative and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and scope reasonably satisfactory to the Representative, with
reproduced copies or signed counterparts thereof for each of the
Underwriters confirming
13
that they are independent accountants within the meaning of the Act and
the Regulations, that the response to Item 10 of the Registration
Statement is correct in so far as it relates to them and stating in
effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations
thereunder;
(ii) on the basis of a reading of the amounts included
in the Registration Statement and the Prospectus under the
heading "Summary Financial Data" which would not necessarily
reveal matters of significance with respect to the comments set
forth in such letter, a reading of the minutes of the meetings
of the shareholders and directors of the Company, and inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the
Registration Statement and the Prospectus, nothing came to their
attention which caused them to believe that:
(A) the amounts in "Summary Financial Data," and
included or incorporated by reference in the
Registration Statement and the Prospectus do not agree
with the corresponding amounts in the audited financial
statements from which such amounts were derived; or
(B) with respect to the Company, there were, at
a specified date not more than five business days prior
to the date of the letter, any decreases in net sales,
income before income taxes and net income or any
increases in long-term debt of the Company or any
decreases in the capital stock, working capital or the
shareholders' equity in the Company, as compared with
the amounts shown on the Company's audited Balance Sheet
for the fiscal year ended June 27, 1997 included in the
Registration Statement or the audited Statement of
Operations, for such year; and
(iii) they have performed certain other procedures as a
result of which they determined that information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from
the general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and reasonably
specified by the Representative agrees with the accounting
records of the Company.
References to the Registration Statement and the Prospectus in
this paragraph (e) are to such documents as amended and supplemented at
the date of such letter.
14
(f) The Representative shall have received on each Closing Date
from Xxxxxx Xxxxxx Flattau & Klimpl, LLP, counsel for the Company, an
opinion, addressed to the Representative and dated such Closing Date,
and in form and scope satisfactory to counsel for the Underwriters, with
reproduced copies or signed counterparts thereof for each of the
Underwriters, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Prospectus. To the
knowledge of such counsel, the Company has no subsidiary and
does not control, directly or indirectly any corporation,
partnership, joint venture, association or other business
organization except for those listed on Schedule II attached
hereto and those permitted to be excluded in a registration
statement pursuant to Item 601, Exhibit 21 of Regulation S-K
(each such corporation singly a "Subsidiary" and collectively,
the "Subsidiaries"). Each of the Subsidiaries has been duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, with full corporation
power and authority to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus. To the knowledge of such counsel,
the Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and
declarations and filings with, all federal, state, possession,
local, foreign and other governmental authorities and all courts
and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus. The Company and each of the
Subsidiaries is duly qualified to do business and is in good
standing, in each jurisdiction where the failure to be so
qualified could have a material adverse effect on the operating
condition (financial and otherwise) or business of the Company
and each of the Subsidiaries. Neither the Company nor any
Subsidiary owns, leases or licenses any property or conducts any
business outside the United States of America, except as may be
described in the Prospectus.
(ii) The Company has authorized, issued and outstanding
capital stock as set forth in the "actual" column of the
capitalization table under the caption "Capitalization" in the
Prospectus. The certificates evidencing the Shares are in due
and proper legal form. Each outstanding share of Common Stock
has been duly and validly authorized and issued, fully paid, and
non-assessable, without any personal liability attaching to the
ownership thereof, and has not been issued and is not owned or
held in violation of any preemptive right of shareholders. To
the knowledge of such counsel, all of the capital stock of the
Subsidiaries is owned of record and beneficially by the Company,
free and clear of all liens, security interests, pledges,
changes, encumbrances, stockholders' agreements and voting
trusts. To the knowledge of such counsel, there is no
commitment, plan, or arrangement to issue, and no outstanding
option, warrant, or other right calling for
15
the issuance of, any share of capital stock of the Company or
any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for capital
stock of the Company, except as may be properly described in the
Prospectus. To the knowledge of such counsel, there is
outstanding no security or other instrument which by its terms
is convertible into, exercisable for or exchangeable for capital
stock of the Company, except as may be properly described in the
Prospectus.
(iii) To the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other proceeding
(formal or informal), or investigation before any court or
before any public body or board pending, threatened, or in
prospect (or any basis therefor) with respect to the Company,
any of the Subsidiaries or any of their respective operations,
businesses, properties, assets, or financial condition except as
may be properly described in the Prospectus or such as
individually or in the aggregate do not now have and will not in
the future have a material adverse effect upon the operations,
business, properties, assets, or financial condition of the
Company or any of the Subsidiaries. To the knowledge of such
counsel, neither the Company nor any of the Subsidiaries is
involved in any labor dispute, nor is such dispute threatened,
which dispute would have a material adverse effect upon the
operations, business, properties, assets or financial condition
of the Company or any of the Subsidiaries. Neither the Company
nor any of the Subsidiaries is in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, or
decree, except as may be properly described in the Prospectus or
such as in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations,
business, properties, assets, or financial condition of the
Company or any of the Subsidiaries; nor is the Company or any of
the Subsidiaries required to take any action in order to avoid
any such violation or default.
(iv) To the knowledge of such counsel, neither the
Company, any of the Subsidiaries, nor any other party is now or
is expected by the Company or any of the Subsidiaries to be in
violation or breach of, or in default with respect to, complying
with any term, obligation or provision of any contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding which is material
to the Company or any of the Subsidiaries or by which any of its
properties or businesses may be bound or affected and no event
has occurred which with notice or lapse of time or both would
constitute such a default.
(v) Neither the Company nor any of the Subsidiaries is
in violation or breach of, or in default with respect to, any
term of its certificate of incorporation (or other charter
document) or by-laws.
(vi) The Company has all requisite power and authority
to execute, deliver and perform this Agreement and to issue and
sell the Shares. All necessary
16
corporate proceedings of the Company have been taken to
authorize the execution, delivery and performance by the Company
of this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company, is the legal, valid and
binding obligation of the Company and (subject to applicable
bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable as
to the Company in accordance with its terms. No consent,
authorization, approval, order, license, certificate or permit
of or from, or declaration or filing with, any federal state,
possession, local, foreign or other governmental authority or
any court or other tribunal is required by the Company, for the
execution, delivery or performance by the Company of this
Agreement (except filings under the Act which have been made
prior to the Closing Date and consents consisting only of
consents under "blue sky" or securities laws). To the knowledge
of such counsel, no consent of any party to any contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding to which the
Company is a party, or to which any of their respective
properties or assets are subject, is required for the execution,
delivery or performance of this Agreement; and the execution,
delivery and performance of this Agreement will not violate,
result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage, deed
of trust, note, arrangement or understanding, in each case known
to such counsel, or violate or result in a breach of any term of
the certificate of incorporation (or other charter document) or
by-laws of the Company, or violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or
decree binding on the Company or to which any of its operations,
businesses, properties or assets are subject.
(vii) The Firm Shares and the Option Shares are duly and
validly authorized. Such opinion delivered at each of the
Closing Dates shall state that each Share, as the case may be,
to be delivered on that date is duly and validly issued, fully
paid, and non-assessable, with no personal liability attaching
to the ownership thereof, and is not issued in violation of any
preemptive rights of shareholders, and the Underwriters have
received good title to the Shares purchased by them from the
Company for the consideration contemplated herein and in good
faith and without notice of any adverse claim within the meaning
of the Uniform Commercial Code, free and clear of any liens,
security interests, pledges, charges, encumbrances,
shareholders' agreements, voting trusts and other claims. The
Common Stock, the Preferred Stock, the Firm Shares and the
Option Shares conform to all statements relating thereto
contained in the Registration Statement or the Prospectus.
(viii) To the knowledge of such counsel, any contract,
agreement, instrument, lease or license required to be described
in the Registration Statement or the Prospectus has been
properly described therein. To the knowledge of such counsel,
any contract, agreement, instrument, lease or license required
to be filed
17
as an exhibit to the Registration Statement has been filed with
the Commission as an exhibit to or has been incorporated as an
exhibit by reference into the Registration Statement.
(ix) Insofar as statements in the Prospectus purport to
summarize the status of litigation or the provisions of laws,
rules, regulations, orders, judgments, decrees, contracts,
agreements, instruments, leases or licenses, such statements
have been prepared or reviewed by such counsel and to the
knowledge of such counsel, accurately reflect the status of such
litigation and provisions purported to be summarized and are
correct in all material respects.
(x) The Company is not an "investment company" as
defined in Section 3(a) of the Investment Company Act and, if
the Company conducts its business as set forth in the
Prospectus, will not become an "investment company" and will not
be required to be registered under the Investment Company Act.
(xi) To the knowledge of such counsel, no person or
entity has the right to require registration of shares of Common
Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement except such
persons or entities from whom written waivers of such rights
have been received prior to the Closing Date.
(xii) The Registration Statement has become effective
under the Act. No Stop Order has been issued and no proceedings
for that purpose has been instituted or are threatened, pending,
or to such counsel's knowledge, contemplated.
(xiii) The Registration Statement, any Rule 430A
Prospectus, and the Prospectus, and any amendment or supplement
thereto (other than financial statements and other financial
data and schedules which are or should be contained in any
thereof, as to which such counsel need express no opinion),
comply as to form in all material respects with the requirements
of the Act and the Regulations. To the knowledge of such
counsel, the conditions for the use of Form S-2 have been
satisfied with respect to the Registration Statement.
(xiv) Such counsel has no reason to believe that any of
the Registration Statement, any Rule 430A Prospectus, or the
Prospectus, or any amendment or supplement thereto (other than
financial statements and other financial data and schedules
which are or should be contained in any thereof, as to which
such counsel need express no opinion), contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
(xv) To the knowledge of such counsel, since the
effective date of the Registration Statement, no event has
occurred which should have been set forth in
18
an amendment or supplement to the Registration Statement or the
Prospectus which has not been set forth in such an amendment or
supplement.
(xvi) The agreement of each officer, director and
principal stockholder of the Company, stating that for a period
of 180 days from the date on which the public offering of the
Shares commences, such officer, director and principal
stockholder will not, without the prior written consent of
Xxxxxx & Xxxxxxx, Inc., offer, pledge, sell, contract to sell,
grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any shares of Common Stock (or any other
securities of the Company or any security or other instrument
which by its terms is convertible into, exercisable for, or
exchangeable for shares of Common Stock or other securities of
the Company, including, without limitation, any shares of Common
Stock issuable under any employee stock options), beneficially
owned by such individual has been duly and validly authorized,
executed and delivered by such individual and constitutes the
legal, valid and binding obligation of such individual
enforceable against such individual in accordance with its
terms.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the Prospectus
and in conferences with officers and other representatives of the Company,
representatives of the Representative and representatives of the independent
accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel has not independently verified and is not passing
upon and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis of the
foregoing and relying as to materiality upon the representations of executive
officers of the Company after conferring with such executive officers, no facts
have come to the attention of such counsel which lead such counsel to believe
that the Registration Statement at the time it became effective contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus, except for the financial statements and other financial
and statistical data included therein as to which counsel need express no
opinion, as amended or supplemented on the date thereof contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering their opinion as aforesaid, counsel may rely upon
an opinion or opinions, each dated the Closing Date, of other counsel retained
by the Company as to laws of any jurisdiction other than the Federal laws of the
United States, the General Corporate Law of the states of Delaware and New York,
provided that (1) each such local counsel is reasonably acceptable to the
Representative and (2) such reliance is expressly authorized by each opinion so
relied upon and a copy of each such opinion is addressed to the Representative
and is in form and substance reasonably satisfactory to them and their counsel.
In addition, such counsel may rely, as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers
19
of the Company, provided that executed copies of such certificates are provided
to the Representative.
(g) The Representative shall have received on each Closing Date
from Morgan& Xxxxxxxx, patent counsel to the Company, an opinion, addressed to
the Representative and dated such Closing Date, and in form and scope
satisfactory to counsel for the Representative with respect to such patent
matters as the Representative may reasonably require.
(h) The Representative shall have received on each Closing Date
from XxXxxxxxx Xxxxxx and ____________________, local counsel to the Company, an
opinion, addressed to the Representative and dated such Closing Date and in form
and scope satisfactory to counsel for the Representative with respect to such
matters as the Representative may reasonably require.
(i) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be satisfactory
in form and substance to the Representative and its counsel, and the
Underwriters shall have received from Squadron, Ellenoff, Plesent & Xxxxxxxxx,
LLP, a favorable opinion, addressed to the Representative and dated such Closing
Date, with respect to the Shares, the Registration Statement and the Prospectus,
and such other related matters, as the Representative may reasonably request,
and the Company shall have furnished to Squadron, Ellenoff, Plesent & Xxxxxxxxx,
LLP, such documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company shall use its best efforts to cause the
Registration Statement to become effective as promptly as
possible. If the Registration Statement has become or becomes
effective with a form of prospectus omitting Rule 430A
information, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus,
properly completed, pursuant to Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to you
of such timely filing. The Company shall notify you immediately,
and confirm such notice in writing, (A) when the Registration
Statement and any post-effective amendment thereto become
effective, (B) of the receipt of any comments from the
Commission or the "blue sky" or securities authority of any
jurisdiction regarding the Registration Statement, any
post-effective amendment thereto, the Prospectus, or any
amendment or supplement thereto, and (C) of the receipt of any
notification with respect to a Stop Order. The Company shall not
file any amendment of the Registration Statement or supplement
to the Prospectus unless the Company has furnished the
Representative a copy for their review prior to filing and shall
not file any such proposed amendment or supplement to which the
Representative reasonably object. The Company shall use its best
efforts to prevent the issuance
20
of any Stop Order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(ii) During the time when a prospectus relating to the
Shares is required to be delivered hereunder or under the Act or
the Regulations, comply so far as it is able with all
requirements imposed upon it by the Act, as now existing and as
hereafter amended, and by the Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales
of or dealings in the Shares in accordance with the provisions
hereof and the Prospectus. If, at any time when a prospectus
relating to the Shares is required to be delivered under the Act
and the Regulations, any event as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Act or the Regulations, the
Company promptly shall prepare and file with the Commission,
subject to the third sentence of paragraph (i) of this Section
6(a), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such
compliance.
(iii) The Company shall make generally available to its
security holders and to the Representative as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date (or 90 days if such
12-month period coincides with the Company's fiscal year), an
earnings statement (which need not be audited) of the Company,
covering such 12-month period, which shall satisfy the
provisions of Section 11(a) of the Act or Rule 158 of the
Regulations.
(iv) The Company shall furnish to the Representative and
counsel for the Underwriters, without charge, signed copies of
the Registration Statement (including all exhibits thereto,
Incorporated Documents and amendments thereto) and to each other
Underwriter a copy of the Registration Statement (without
exhibits thereto or Incorporated Documents) and all amendments
thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act or the
Regulations, as many copies of any preliminary prospectus and
the Prospectus and any amendments thereof and supplements
thereto as the Representative may reasonably request.
(v) The Company shall cooperate with the Representative
and its counsel in endeavoring to qualify the Shares for offer
and sale under the laws of such jurisdictions as the
Representative may designate and shall maintain such
qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company
shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a
general
21
consent to service of process in any jurisdiction or subject
itself to taxation as doing business in any jurisdiction.
(vi) For a period of five years after the date of this
Agreement, the Company shall supply to the Representative, and
to each other Underwriter who may so request in writing, copies
of such financial statements and other periodic and special
reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock and
to furnish to the Representative a copy of each annual or other
report it shall be required to file with the Commission.
(vii) Without the prior written consent of the
Representative, for a period of 180 days from the date on which
a public offering of the Shares commences, the Company shall not
issue, sell or register with the Commission or otherwise dispose
of, directly or indirectly, any securities of the Company (or
any securities convertible into or exercisable or exchangeable
for securities of the Company), except for the issuance of the
Shares pursuant to the Registration Statement.
(viii) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) and pay the
applicable fees in accordance with Rule 111 promulgated under
the Act by the earlier of (i) 10:00 p.m., Eastern Standard Time,
on the date of this Agreement or (ii) the time confirmations are
sent or given, as specified by Rule 462(b)(2).
(ix) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market.
(x) Prior to each Closing Date and for a period of 25
days thereafter, the Representative shall be given reasonable
written prior notice of any press release or other direct or
indirect communication and of any press conference with respect
to the Company, the financial condition, results of operations,
business, properties, assets, liabilities of the Company, or
this offering.
(b) The Company agrees to pay, or reimburse if paid by the
Representative, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
relating to the registration and public offering of the Shares including
those relating to: (i) the preparation, printing, filing and
distribution of the Registration Statement including all exhibits
thereto, each preliminary prospectus, the Prospectus, all amendments and
supplements to the Registration Statement and the Prospectus, and any
documents required to be delivered with any Preliminary Prospectus or
the Prospectus, and the printing, filing and distribution of the
Agreement Among Underwriters, this Agreement and related documents; (ii)
the preparation and delivery of certificates for the Shares to the
Underwriters; (iii) the registration or qualification of the
22
Shares for offer and sale under the securities or Blue Sky laws of the
various jurisdictions referred to in Section 6(a)(v), including the fees
and disbursements of counsel for the Underwriters in connection with
such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky
memoranda; (iv) the furnishing (including costs of shipping and mailing)
to the Representative and to the Underwriters of copies of each
preliminary prospectus, the Prospectus and all amendments or supplements
to the Prospectus, and of the several documents required by this Section
to be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold; (v) the filing fees of the National
Association of Securities Dealers, Inc. in connection with its review of
the terms of the public offering; (vi) the furnishing (including costs
of shipping and mailing) to the Representative and to the Underwriters
of copies of all reports and information required by Section 6(a)(vi);
(vii) inclusion of the Shares for quotation on the NASDAQ National
Market System; and (viii) all transfer taxes, if any, with respect to
the sale and delivery of the Shares by the Company to the Underwriters.
Except as otherwise contemplated by Section 9 hereof, the Underwriters
will pay their own counsel fees and expenses to the extent not otherwise
covered by clause (iii) above, and their own travel and travel-related
expenses in connection with the distribution of the Shares.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged
omission to state therein such fact required to be stated therein or
necessary to make such statements therein not misleading. Such indemnity
shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) on account of any losses, claims, damages
or liabilities arising from the sale of the Shares to any person by such
Underwriter if such untrue statement or omission or alleged untrue
statement or omission was made in
23
such preliminary prospectus, the Registration Statement or the
Prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by the
Representative on behalf of any Underwriter specifically for use
therein. In no event shall the indemnification agreement contained in
this Section 7(a) inure to the benefit of any Underwriter on account of
any losses, claims, damages, liabilities or actions arising from the
sale of the Shares upon the public offering to any person by such
Underwriter if such losses, claims, damages, liabilities or actions
arise out of, or are based upon, a statement or omission or alleged
omission in a preliminary prospectus and if, in respect to such
statement, omission or alleged omission, the Prospectus differs in a
material respect from such preliminary prospectus and a copy of the
Prospectus has not been sent or given to such person at or prior to the
confirmation of such sale to such person. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement, to the same
extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as such losses, claims, damages or liabilities arise
out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which was made in any Preliminary
Prospectus, any Rule 430A Prospectus, the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, which were
made in reliance upon and in conformity with information furnished in
writing to the Company by the Representative on behalf of any
Underwriter for specific use therein; provided, however, that the
obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the
underwriting discount applicable to the Shares purchased by such
Underwriter hereunder. For all purposes of this Agreement, the amounts
of the selling concession and reallowance set forth in the Prospectus
constitute the only information furnished in writing by or on behalf of
any Underwriter expressly for inclusion in any Preliminary Prospectus,
any Rule 430A Prospectus, the Registration Statement or the Prospectus
or any amendment or supplement thereto.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section 7(a) or 7(b)
shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under
24
this Section. In case any such action, suit or proceeding shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or
other expenses, except as provided below and except for the reasonable
costs of investigation subsequently incurred by such indemnified party
in connection with the defense thereof. The indemnified party shall have
the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment of counsel by such indemnified party has
been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in which
case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party), or (iii) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel employed by the indemnified party shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its
written consent, which consent shall not be unreasonably withheld or
delayed.
8. Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Sections 7(a) and
(b) is due in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who may also be
liable for contribution) to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as (x) the total proceeds from the Offering (net of
underwriting discounts but before deducting expenses) received
25
by the Company from the sale of the Shares, as set forth in the table on the
cover page of the Prospectus (but not taking into account the use of the
proceeds of such sale of Shares by the Company), bear to (y) the underwriting
discount received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and the Underwriters
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact related to information supplied by
the Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, in no case shall any Underwriter (except as may be provided in
the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder, provided, however that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Company within the
meaning of the Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
subject in each case to the immediately preceding sentence of this Section 8.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on any Closing Date by the Representative by notifying
the Company at any time prior to the purchase of the Shares:
(a) in the absolute discretion of the Representative at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted, or
in the opinion of the Representative will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States
is such as to make it, in the judgment of the Representative,
inadvisable to proceed with the Offering; (iii) if there shall be such a
material adverse
26
change in general financial, political or economic conditions or the
effect of international conditions on the financial markets in the
United States such as to make it, in the judgment of the Representative,
inadvisable or impracticable to market the Shares; (iv) if trading in
the Shares has been suspended by the Commission or trading generally on
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. or
the Nasdaq National Market System has been suspended or limited, or
minimum or maximum ranges for prices for securities shall have been
fixed, or maximum ranges for prices for securities have been required,
by said exchanges or by order of the Commission, the National
Association of Securities Dealers, Inc., or any other governmental or
regulatory authority; or (v) if a banking moratorium has been declared
by any state or federal authority, or
(b) at or before any Closing Date, if any of the conditions
specified in Section 5 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representative or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representative may find one or more substitute underwriters to
purchase such Shares or make such other arrangements as the Representative may
deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representative, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date:
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event shall
the maximum number of Shares that any Underwriter has agreed to purchase
pursuant to Section 1 be
27
increased pursuant to this Section 10 by more than one-ninth of such
number of Shares without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to an additional business day within
which it may, but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Representative to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Representative or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representative and the Company. If the number
of Shares to be purchased on such Closing Date by such defaulting Underwriter or
Underwriters shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this Section
within the period stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company and without liability on the part
of the Company, except as provided in Sections 6(b), 7, 8 and 9. The provisions
of this Section shall not in any way affect the liability of any defaulting
Underwriter to the Company or the nondefaulting Underwriters arising out of such
default. A substitute underwriter hereunder shall become an Underwriter for all
purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and their respective successors and assigns and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered, or by telefax or telegraph if subsequently confirmed by letter,
(a) if to the Representative, to Xxxxxx & Xxxxxxx, Inc., 000 Xxxxxxx Xxxxxx, 2
World Financial Center, New York, New York 10281, Attention: Xxxx X. Xxxxx, III,
Managing Director, telecopy: (000) 000-0000/49, (b) if to the
28
Company, to the Company's agent for service as such agent's address appears on
the cover page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of the
person or persons or entity or entities require.
All section headings herein are for convenience of reference only and
are not part of this Agreement, and no construction or inference shall be
derived therefrom.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
TII INDUSTRIES, INC.
By: _________________________________
Name: ___________________________
Title: __________________________
29
Confirmed on behalf of itself
and as the Representative of the several Underwriters
named in Schedule I annexed hereto:
XXXXXX & XXXXXXX, INC.
By:______________________________
Name: Xxxx X. Xxxxx, III
Title: Managing Director
30
SCHEDULE I
Number of Firm
Shares to be
NAME OF UNDERWRITER Purchased
------------------- ---------
Xxxxxx & Xxxxxxx, Inc.................................
Total 2,500,000
============
31
SCHEDULE II
Subsidiaries of the Company
Name State of Jurisdiction of Corporation
---- ------------------------------------
TII Corporation Delaware
TII International, Inc. Delaware
Telecommunications Industries, Inc. New York
TII Dominicana, Inc. Delaware
Crown Tool & Die Company, Inc. Puerto Rico
TII-Ditel, Inc. North Carolina
32
